Intro: Broadcasting live from the Business RadioX studio in Atlanta, Georgia. It’s time for Atlanta Business Radio, brought to you by Kennesaw State University’s Executive MBA program, the accelerated degree program for working professionals looking to advance their career and enhance their leadership skills. And now, here’s your host.

Lee Kantor: Lee Kantor are here, another episode of Atlanta Business Radio. And this is going to be a good one. But before we get started, it’s important to recognize our sponsor, CSU’s executive MBA program. Without them, we wouldn’t be sharing these important stories. Today on Atlanta Business Radio, we have Sarah Daw. She is the co-founder and CEO of the CFO center, and she’s author of the book Strategy and leadership as a service how the Access Economy meets the C-suite. Welcome, Sarah.

Sara Daw: Hello. Thanks for having me.

Lee Kantor: Well, I am so excited to learn what you’re up to. First off, tell us about the CFO center. How are you serving folks?

Sara Daw: So the CFO center provides fractional CFOs to growing entrepreneurial organizations. So it’s for those businesses that don’t need, don’t want and can’t afford a full time CFO, but they still need the skill set to scale, and they can work with one of our team on a fractional basis one day a week, two days a month, whatever the business needs, flexibly and affordably scaling it up and down as they go so they get all the skills they need to get to big, which is normally what a lot of those organizations want to do.

Lee Kantor: Now, what’s your background? How long have you been involved in this line of work?

Sara Daw: Okay, so a long time. I mean, I I’m a CFO and I actually came to came to the fractional CFO world in the early 2000. I was a CA with an MBA, and I was just starting a family, and I realized that I needed to have a fulfilling career that would enable me to be mum, because I was going to grow a family, yet also to work and have something rewarding on the career side. So I saw this niche in the marketplace around these businesses. Entrepreneurial businesses not having access to this full time skill set at the CFO level, and set myself up and then and then found my my co-founder, the founder of the business, Colin Mills of the PhD center, joined him. He he started it a few years earlier, and there were just a few of us at that stage, and off we went. And now we’re in 18 countries globally. So it’s really taken off as a concept.

Lee Kantor: Now, do you exclusively focus on CFOs or do you have other services in and around the C suite.

Sara Daw: So we do have other services not all operating yet in the US, but globally. We operate fractional c suite services across people, so HR, marketing, sales and finance.

Lee Kantor: Now is the thesis of your book that this is kind of the future of business is maybe a mindset shift to having permanent members of the C-suite, but just to have fractional and just kind of partner with different types of experts along the path.

Sara Daw: Yes. I think you’ve hit the nail on the head there. It is a mindset shift. So the way I see the world of work unfolding as we go forward in response to all the challenges that organizations are facing and to make sure they’ve got an agile talent strategy. What I am seeing happening is roles unbundling into work, and that work is going to be done by humans and by automation and machines, but it’s going to be parceled up into work and we don’t necessarily anymore have to have full. Time, complete roles. And that’s where the fractional concept really meets this head on. And the other mindset shift is that we don’t need to be employed anymore with an employment contract to deliver valuable and important work. So the fractional CFO in in my team are highly committed, intensely engaged with the organizations that they’re helping to grow. They want the variety, flexibility and control of doing it on a self-employed basis, and they want to live and work in a new way. So it’s it’s to it’s these two phenomena that’s coming together. Entrepreneurs who need the skill set flexibly and affordably. And CFOs who want to live and work differently through an access model rather than an employment model.

Lee Kantor: Now, um, Obviously we’re in a world that exists today. Um, if you could just start from scratch, how would you implement this strategy on a business? Maybe you invented, you know, on your head last night. Like, how would you go about kind of building an infrastructure, leveraging, you know, all the experts that you have at hand right now?

Sara Daw: Yeah. So what I would do, I mean, if I was an entrepreneur, I would I would have a core of employees, a core base. But I would supplement that with, um, skill sets that I need on a long term and ongoing basis, but that I just don’t need and can’t afford full time. So I bring in I would bring in a fractional C-suite across the business functions that I feel either in sequence or in tandem, that are the most critical, um, to my growth. So I’d organize that. Uh, finance tends to be one of the early ones. You need to know your numbers. You can’t really fly blind as a business owner. And then, depending on other C-suite roles, perhaps tech depending on on my my structure or how I’m going to market marketing people, etc., I’d phase those in. It’s very affordable to have this whole C-suite surrounding the entrepreneur. And then I would also be looking for to engage with a wider workforce, perhaps in the tech space or the freelance space that I need to bring in to deliver specific skills to enhance my business and get it tech enabled. And I may even have a wider workforce from the gig economy that bring in more flexibility and efficiency on a volume scale. What I’m saying here is the way I think organizations need to think going forward is that their workforce is not just their employee base anymore. It’s all of those that I just mentioned. And we as leaders need to get really good at building one culture and culture and one team because they’re all important and valuable members.

Lee Kantor: Now, you mentioned the word culture. Um, how do you go about building a culture where if everybody is fractional or freelance, each of them could be working individually in five other places that could have a slightly different culture, like how do you build a culture in an organization that is, you know, filled with fractionals?

Sara Daw: Yes. So obviously, I mean, the culture is set from the top down, from the leader, from the business owner, and they will have their particular culture and it’s on us. It’s on the fractional leaders to align with that culture. And what’s what’s interesting about fractional work is that the the fractional leaders choose the businesses that they want to work with. So they will only work with the organizations where they match, and the culture aligns and the values match. So they will be in a place that will be sort of the line of least resistance if you like, and they will back up the culture of the organization that the entrepreneur is building. And it’s on the fractional leaders to be good at context shifting. So we get good at working between different businesses. In an ideal world, a fractional leader may have three, four, five businesses they work with, and they will be very good at making sure each business feels like they are the only business they work with, because they know how to do that. They know how to communicate. They’ll be available outside hours. They realize business problems don’t just pop up between 9 and 5 Monday to Friday, and they want to create those long term relationships, and they’ll sit alongside the entrepreneur through thick and thin to help them get where they want to go, because they’re aligned and they believe in the business.

Lee Kantor: Now, this is where I would think that an organization like yours is super valuable, because I’m really having a relationship with your firm and you’re kind of plugging and playing in the fractional expert I need at any given time where I might need a fractional expert to launch a business, might be a different expert to manage and grow a business.

Sara Daw: Yes. That’s such a good point. So a collective like ours, an organization, and I would say we’re a new breed of organization. And I think you’re going to see more of these going forward into the future. We are an organizer, not an employer. And we are the community that supports the collective of the C-suite individuals. So we will be supporting them so that they are fully up to speed with everything they need to know around their function. They share learning and development, they share best practice. And we’re there for the business owner to make sure that we can fill skill and capacity gaps, and that they get the right match of C-suite professional at each stage of their journey. And sometimes what that involves is that an organization will engage with a small team of perhaps CFOs. 1st May be doing a fundraise, one might be doing a systems implementation, but what it means is that they will always get the right skills on board at the right time. They’ll probably have a lead CFO that will be holding the long term relationship, and that may change over time, but they will have others that can come in and perform specific projects that are required on a time critical basis. So effectively, the business always gets the answer they need. And in a very agile, flexible and affordable way.

Lee Kantor: Now, um, what was kind of the thinking behind writing the book? Was it just to kind of get this type of thinking in, you know, in a different format so you can share with more people? Or was that or has this been kind of an itch you’ve been trying to scratch for a while?

Sara Daw: Yes, I guess it was a bit of all of that, actually. Um, the main reason I did it was because I wanted to draw awareness to this area, this niche in the industry and the value it can bring both to the C-suite professionals and the businesses they serve. But importantly, what I wanted to do was bring credibility to this niche because we we at the CFO center, we knew what we did. We knew how we do it, but we didn’t know what the academic concepts were that were underlying it and why it worked. And I really wanted to bring that thought leadership to the world to show that actually, this is actually quite a common concept. So all the listeners here today will be really familiar with the access economy. We are using it all the time. We use it in Spotify. We access our music instead of owning it. We access Zipcar, perhaps a car club. If we don’t own our car, we use Airbnb, we use Netflix. These are all access services and this is no different really. We are part of the access economy. We’re just accessing services of individuals rather than employing them. And it leads to a very, as I said, a very, um, tailored bespoke delivery for the business owner. So I wanted to make sure that everyone knew that this was a disruptive business model, but one that is, um, very accepted in the other areas of goods and services and therefore, um, to give it the credibility and the backing to show that it can work in the service industry.

Lee Kantor: Now, how do you kind of address the issue, like you mentioned, kind of Netflix and that type of and unbundling and then unbundling? Uh, historically it’s been kind of a push pull like we went through here in America with cable television, that it was like, oh, all of a sudden now you have access to ESPN, MTV, the Food Network, access to all these channels, and it’s all one price. And then we get angry that it’s like, well, I don’t want the Food Channel because I don’t care. I don’t care about sports. I want it to be unbundled. And now we’re back to unbundling, where now everything’s individual, and now there’s, uh, you know, a desire for rebundling because it’s getting too expensive, because I’m paying for everything individually now, and it’s more than I was paying when it was bundled, like, where do you see this in that continuum?

Sara Daw: Yes. I think that’s an interesting point because I agree with you of, you know, industries, um, uh, go through life cycles of bundling and unbundling and, and, uh, obviously we’re in an unbundling stage here where unbundling rolls into smaller parts to make it affordable to a segment of the market around the SM. I also, though, see that this is and I will come back to your point, but I also see the unbundling as relevant for larger organizations as well, by the way. So the other part of the market that, um, this unbundling is being very, um, we found very receptive is larger organizations where you have a group CFO or a group CMO who have a shopping list of far too much to do, and they need a fractional team around them that they can access dynamically to bring in the skills to fill all the things that they shouldn’t be doing, or that they haven’t got the skills to do or the capacity to do so. That’s another angle. And yes, we may see in the future, um, perhaps a move to bundling up again. But what I would say is that we are so early on in the unbundling phase at the moment because, you know, I know in the US market, you know, fractional CFOs, um, is a concept that’s, that’s reasonably well understood. Yet on my travels, I am still meeting swathes and swathes of business owners and C-suite professionals who have never heard of it. So I still feel we are at are very much at the forefront of the movement, and we’ve got a long way to go on this unbundling at this stage.

Lee Kantor: So who is kind of the ideal fit for a service like this.

Sara Daw: In terms of the.

Lee Kantor: Like, your ideal client that would be open to this type of thinking. Like they’re not so big that they’ve hired a CFO or they’re they already have a CFO. And maybe that that didn’t work out. And now they want to try this. Like where are they at in their life cycle where this is the exact right fit for you?

Sara Daw: Yeah. So for us it would be entrepreneurial organizations who are open minded. The business owner is willing to welcome outside advice to see how that can deliver a return for them. So it’s the open mindedness that is actually the key differentiator. Entrepreneurial business. They want to grow. They may not be growing. That’s okay. They may not have their business model sorted out. That’s okay. That’s what we can help with. Um, Generally revenue. I’m saying somewhere between 5 million and 100 million in in revenue. But we can work with smaller organizations and and as I said, for the large organizations, that’s where we help an incumbent C-suite to fill the skill and capacity gaps that they need. But it is I have to say, it’s about the open mindedness of wanting to welcome in a different way of doing things, a way where we can bring some rigor, some professionalism, some insights, sector knowledge. We can bring our network and we can bring our skills to really sort of turbocharge and get them in a space where these ambitious business owners get rewarded for everything that they put into their businesses because, you know, they’re remarkable people and we really want to see them succeed.

Lee Kantor: Well, I mean, if they’re already at $5 million in revenue, then they must be doing something right, because that doesn’t happen accidentally. Usually they have to be doing something right, and so they and they must also have enough revenue to afford your fractional CFO. I mean, so it’s a combination of things there. But is there a place for the aspiring entrepreneur, the person that’s earlier on below the 5 million where a service like yours may be not may not be the right fit in terms of, you know, I have a person for you to solve your problem, but you have information to help them. Or is that where the book comes in?

Sara Daw: Yes. I think for those organizations, potentially there’s really a mentoring role to be done. So it’s about sitting alongside the entrepreneur from a mentoring perspective and helping them make the right decisions and finding a and then us helping them find a cost effective way to organize themselves. As I said, some smaller organizations would still be able to use our services. It’s mainly the sweet spot I think is, um, 5 million revenue upwards.

Lee Kantor: And then, um, is there a story you can share of a client you have, um, that maybe came to you with a problem and you were able to, uh, partner with the right, uh, fractional that enabled them to get to a new level. You don’t have to name the name of the organization, but maybe share the problem that they had and how you were able to help them.

Sara Daw: Yes, absolutely. I mean, even fairly recently, actually, we had a business come in that was, um, a luxury car business. And, uh, they were actually going through a sale process, and they got to the point where they just couldn’t keep up with the demands of, um, the due diligence and the sale process with everything that they needed to provide and carry on running the business day to day. So we came in and we actually negotiated, It, um, a much better sale price. Um, along the way, we got their data room in order, and we got them, and we got them through the sale. And then we stayed on with them afterwards because there was an earn out, and the entrepreneurs were keen for us to stay, to encourage and enable them to make sure that they, um, that they carry on, um, meeting the conditions of their owner afterwards. So a real safety net for these organizations and leverage, um, of bringing some professionalism and some expertise to a transaction.

Lee Kantor: Now, when you’re working with your clients, uh, do you kind of have to open their mind to how, like your vision of this rather than what they think they’re buying? So I would think some of them are thinking, this is like a temp service, that I’m buying something until I’m ready to get the real one that I want. And this is just triaging a situation. And it sounds like philosophically, you’re Your. Your belief is that this is the new way of doing things. So this is not kind of a temporary solution. This is the solution.

Sara Daw: Yes. And that is a mind. That’s the mindset shift. So I do think some organizations look at it as I’ve got a problem. Come and fix my problem. Thank you very much. That was great. I’ll call you again when I, when I need you. And that isn’t the way to get best value. Of course we can do that. And a consultant can do that. And we would we would do that for organizations, of course. But the way to get full value from having, um, a fractional CFO sitting alongside you the whole time is that you can dial down the commitment to them in the quieter times. So it is cost effective, but you’ve always got someone looking across the horizon for you to spot. All those issues and risks that you probably don’t know are coming your way. And what we see is that organizations that do step out too early, then come back to us, and then they’re in rather a pickle, because they have got to the point where they’ve left things too late, got into a bit of a knot about something, and then we have to come in and, you know, unravel everything, which is probably more costly in the long term than keeping us on in the first place. So we’re seeing more and more of that. So I think the message is that this is so flexible.

Sara Daw: And, you know, in larger organizations, you don’t have CFOs that come along every day to fix a problem and then say, okay, I’m leaving now because I’ve done everything. Cfo role is ongoing. It’s value adding. And CFOs, um, if they’re not giving a return. And by, you know, we should absolutely be able to measure our return with CFOs after all. So if we’re not delivering a return, we shouldn’t be there. And if we are delivering a return, we absolutely should be there. And it’s affordable. So I’m saying that the business case for a full time CFO can actually be quite a high revenue number for a lot of organizations. And the way to use fractional to the best advantage is to have a fractional C-suite professional, say, CFO, at the top, and let them organize and use the budget you’re saving by them being fractional at the top to make sure you’ve then designed your finance function properly, and you’ve got absolutely the right skills at the right level in the rest of your finance function. And then you’ve got a very, very comprehensive solution to finance that can take you a long way. And for the long term, we’ve definitely got some relationships that are, you know, 15 years old. And it shows that you can go with clients on their journey for in a very productive way on this model.

Lee Kantor: Which is very impressive because the average tenure of a C-suite, I’m sure is, well, less than that, probably less than five years, I would guess.

Sara Daw: Yes, it would be. And the other advantage is that, um, you know, it’s for larger organizations as well. Um, you know, it’s if when you do hire a full time C-suite professional, it’s, you know, it’s tricky to get it right. And the stats are it’s over 213% of salary cost if you get it wrong, and two years of elapsed time where you’ve stood still or potentially gone backwards. And with the fractional model, it’s very easy to bring someone in, try them out to check that they are the right individual for the role. If they aren’t, you can go back to a firm like ours and say, actually, they’re not quite the right match, but I, you know, I want to flex it this way or that and we can and we can find a better match for them. So it’s a really good way to, um, make sure you find the right person and quite, you know, a lot less risky than putting your eggs in one. All your eggs in one basket.

Lee Kantor: Right. Well, in my mind, I’m, I’m kind of buying you and you’re and you’re going to find the right fit for me. If I believe that we have a good partnership.

Sara Daw: Yes.

Lee Kantor: Now, can you talk about you mentioned your global firm. Can you talk about your work here in Atlanta? I know you had an event recently. Can you talk about what your kind of how you’re attacking this market.

Sara Daw: Yes. So we have a team in Atlanta of CFOs, and we are very much looking to support the local market there. We see it as an exciting place to be. And we’ve got a team that are really focused on growth, scalability, profitability. Um, and, you know, producing cash flow for the organizations there. The bit that really gets us out of bed in the morning is seeing the impact we can have on the lives of entrepreneurs and their businesses. Most entrepreneurs have set their business up because, you know, they want to change the world. They’ve got a particular purpose or passion, and often we find them getting dragged into areas of business that, you know, perhaps isn’t their skill set. And finance is one of those. And what we want to do is release their time and give them peace of mind that we can look after it for them so that they can do the things in their business that really matter to them. Um, so yeah, that’s where we are with the Atlanta market. We’re gradually building out our network of partners that we work with. So we’ll have a good network to help, um, plug organizations into that, engage with us in the Atlanta market.

Lee Kantor: And then what other markets are you in in the US?

Sara Daw: Okay. So we’re across the northeast, um, up in Boston and New York and across, um, states across the northeast. We’re in Atlanta. We’re in Texas, we’re in Seattle, and we’re down in Miami.

Lee Kantor: Now, is there, um, kind of an industry that you work in primarily? Is it manufacturing services, you know, legal, like, or is it kind of industry agnostic?

Sara Daw: Yeah. Industry agnostic. But we have team in our team. We will have groups of individuals that are specialist in certain sectors. So we will be able to collaborate and make sure that we get the best, um, people on the role or get advice from a particular sector specialist or functional specialist for a business issue. So we collaborate behind the scenes for all our clients. So when they engage with one CFO, they are tapping into the brainpower, the power of many of a team of CFOs, both locally, nationally and actually internationally. So we’re pretty well connected. And one thing we do really well is even if it’s someone in a different continent who’s got the right skills for a particular problem, we will be able to connect them in. And we also can help organizations who want to expand cross-border, um, either customer wise, supply wise, or even take their own business overseas. We’re also pretty good at soft landing them into the other countries that we’re in and plugging them into our network there. That’s all part of the service of making sure that we help these organizations grow.

Lee Kantor: Now, when you’re kind of doing the match initially, is it more important that the persons from the right industry, or is it more important that they’re in the right kind of stage of growth, like, how do you go about the match making process to ensure the best fit possible?

Sara Daw: I think priority is culture fit, personality fit and culture fit because at the end of the day, business owners are really sharing confidential information about their business. They’re sharing their dreams and desires around how they want to take it forward. We are an insider in that business, and we need to be able to build a relationship with the business owner that’s trusted and long term, and where they feel comfortable psychologically sharing this information with us, knowing that we’re, you know, our intent is to support them with, um, with, with whatever they want to do. So it’s culture fit more than anything I would say. And, you know, if we can have a sector fit and a functional fit on top of that life cycle stage, we will do that. That’s, you know, it’s often possible if we can’t. Um, but there is a particular culture match that we think is important. Then I think we we do that by buddying up. So we make sure that the CFO involved with the, with the client relationship has the functional and sector skills around them from other CFOs to fill any gaps. That’s the beauty of the team.

Lee Kantor: Now, what’s the pain that that prospect is having right now, where the best solution is to call somebody from the CFO center?

Sara Daw: The pain will be where sometimes entrepreneurs think that just something’s missing. You know, they’re not seeing something. They haven’t got visibility. So have they got visibility of their numbers? Do they trust their numbers? Are they making profit? Do they know where they’re making profit? Can they tell us which lines, which business segment, which products, which supplier, which customer are delivering the right margin to them? Because actually, a change in margin can make all the difference. On the bottom line. I see a lot of business owners who nail down their overheads, but the gross margin is a black box. So do they really know their numbers? Um, are they getting the outputs that they want? Perhaps they have, um, perhaps they have a particular issue, a strategic issue that they want to solve. Do they want to buy or sell? Are they thinking of exit? Are they thinking of succession? Um, do they want to raise money for expansion? Do they want a funding partner on board? These are all the sorts of pains and questions that we absolutely, as a CFO, a strategic commercial CFO, can help help get the answer for these organizations.

Lee Kantor: And if somebody wants to learn more, what’s the best way to connect the website to learn more about the CFO center and also maybe get a hold of your book?

Sara Daw: Yes. So WW, the CFO, WW, CFO center.com is the website. And if you want to get a copy of my book, it’s on Amazon strategy and leadership and service. And anyone can connect with me on LinkedIn. Sara.

Lee Kantor: Well, Sara, thank you so much for sharing your story today. You’re doing such important work and we appreciate you.

Sara Daw: I really appreciate, uh, this this opportunity. And thanks so much for such great questions.

Lee Kantor: All right. This is Lee Kantor. We’ll see you all next time on Atlanta Business Radio.